The downward spiral of SSS’ favorite airline continues as the fallout from kicking Billie Joe Armstrong off a flight in 2011 for wearing saggy pants continues. I understand the CEO of Southwest has checked into the same rehabilitation center as Billie Joe, as they both try to regain their former stature. This was SSS’ reaction when told of the 49% drop in Southwest profits:
Southwest Airlines 4th-quarter profit falls 49%
By Tess Stynes
Southwest Airlines Co.’s (NYSE:LUV) fourth-quarter earnings fell 49% as the company booked lower fuel-hedging gains, higher operating expenses and a decline in passenger traffic.
The largest carrier of domestic U.S. passengers is being retooled from its roots as a pioneer discount airline, enlarged by the acquisition of AirTran Airways and with more connecting flights, in addition to plans for international service.
Chairman and Chief Executive Gary Kelly on Thursday said Southwest is on track with its plan to fully integrate AirTran by the end of next year.
The airline in October outlined plans that it hoped would halt the growth in costs by mid-2013, alongside more efforts to boost revenue despite a weak economic outlook that has encouraged airlines to launch fare sales during the fall.
Southwest on Thursday said that it expects passenger unit revenue growth of 2% to 3% for January.
“As we enter 2013, bookings and revenue trends, thus far, suggest a year-over-year improvement in January 2013 passenger unit revenues in the two to three percent range,” said Chairman and Chief Executive Gary Kelly. “While the effect of U.S. tax increases on the domestic economy remains uncertain, bookings for the remainder of first quarter, thus far, are strong.”
Southwest reported a profit of $78 million, or 11 cents a share, down from $152 million, or 20 cents a share, a year earlier. Excluding fuel-hedging impacts, integration-related charges and other items, adjusted earnings were unchanged at nine cents. Revenue increased 1.6% to $4.17 billion as freight revenue growth offset declines in passenger revenue and other revenue.
Analysts polled by Thomson Reuters most recently projected earnings of eight cents on revenue of $4.21 billion.
Operating expenses were up 3.1%.
Average passenger revenue per available seat mile declined 2%. Traffic declined 1.4%, while capacity eased 0.3%. Load factor, a measure of plane fullness, fell to 79.6% from 80.5%.
Shares closed Wednesday at $11.36 and were inactive premarket.
MAYBE THIS WILL CHEER SSS UP: